GRAINS-Soybeans in choppy trade after China imposes steeper tariffs on U.S. goods

CANBERRA/PARIS, April 9 (Reuters) - Chicago soybean futures were set to rise for the third consecutive session, brushing off some selling pressure earlier in the day after China raised its tariffs on U.S. goods to 84% from 34%.

The most-active soybean contract on the Chicago Board of Trade (CBOT) Sv1 was up 0.2% at $9.94-1/2 a bushel by 1130 GMT. It briefly fell as low as $9.88-1/4 right after China's announcement.

CBOT corn Cv1 was down 0.1% at $4.68-1/2 a bushel, and CBOT wheat Wv1 rose 0.1% to $5.40-1/2 a bushel, with the U.S. dollar index .DXY weaker for a second day in a row. FRX/

All three CBOT contracts are hit by a tit-for-tat tariff war that erupted last week between the United States and China, but soybeans were hit hardest, slumping as low as $9.69-1/2 on Monday.

China is the world's biggest soy buyer and takes in around half of U.S. soybean exports each year.

Beijing's willingness to retaliate against U.S. tariffs has led to fears of weaker demand for U.S. soybeans and pushed up the soybean basis in Brazil, a rival supplier, StoneX analyst Bevan Everett wrote in a note.

"That has brought the U.S. back to competitiveness," he said. "Other unaffected destinations are finding U.S. values cheaper than Brazil for April shipment."

However, the U.S. may find it impossible to replace China, said Ole Houe, director of advisory services at IKON Commodities, predicting that Chicago prices would fall further.

"It's relatively easy for China to find beans in South America. It's very hard for the U.S. to find alternative buyers," he said.

Also, supporting Chicago soybeans - and corn - was the prospect of increased demand for U.S. biofuel feedstock, following a recommendation from an industry coalition to sharply raise federal mandates for biomass diesel blending in 2026.

Traders were meanwhile positioning themselves ahead of a U.S. Department of Agriculture supply and demand report due for release on Thursday.